The Central Bank of Kenya has revised upwards its economic growth projection for this year to 6.4 percent, backed by strong growth in the first half of the year and the continued reopening of the economy from Covid-19 restrictions.
Central Bank governor Patrick Njoroge said the upward revision has come after the regulator looked at the economic performance numbers for the half of the year, which were not yet available when the CBK made its previous projection of 6.1 percent gross domestic product (GDP) growth.
In 2022, the apex bank sees the economy expanding by six percent up from an earlier projection of 5.6 percent.
Sectors such as manufacturing, transport, hospitality are expected to lead the growth, making up for an expected slowdown in agriculture which is being hampered by poor weather.
“We have used this new quarterly data, leading economic indicators and other information that we have and our projection for 2021, the annual is 6.4 percent and six percent in 2022.
“We still need to refine them a little bit more particularly 2022 but on the whole, these are the numbers we have been able to put together,” said Dr Njoroge.
Kenya recorded a strong resurgence in the economy in the second quarter of the year, with GDP expanding by 10.1 percent compared to the corresponding period last year when tough Covid-19 containment measures led to a 4.7 percent contraction.
The economy contracted by 0.3 percent in 2020.
The Treasury is projecting real GDP growth of six percent, which is similar to the recent International Monetary Fund forecast. The World Bank, on the other hand, projects growth to stand at five percent in 2021, revised from an earlier prediction of 4.5 percent.
There is, however, caution over the growth prospects given the emergence of new Covid-19 variants, debt concerns and anxiety over the election.
The key concern in 2022 remains the General Election, which historically has had a dampening effect on growth, investor confidence and capital flows.